In 2017, Medicaid paid $29.1 billion for prescription drugs—amounting to 5.1% of total Medicaid costs that year. And according to the Medicaid and CHIP Payment and Access Commission (MACPAC), prescription drugs are expected to see one of the largest growth rates in annual spending among any health care goods or services over the next decade.
That’s an expensive burden for a federal program that uses taxpayer money. And while politicians in Washington argue over healthcare spending policies and how to cut costs while still providing federal aid and services, new research published in Health Economics suggests there is at least one very accessible, very achievable way to bring those Medicaid prescription drug costs down.
And (you guessed it) it has to do with cannabis legalization.
Shyam Raman is a researcher and public health economist at Cornell University. He recently co-authored a paper with Ashley Bradford, who studies public policy at Indiana University’s O’Neill School of Public and Environmental Affairs, in which they examined how recreational cannabis laws (RCL) affected rates of prescription drug use among Medicaid enrollees. The study was based on previous research conducted by Bradford that found states with medical cannabis laws (MCL) saw significant reductions in Medicaid prescription rates. Her 2018 study concluded that if every state adopted MCL, the programmatic savings would be between $1.4 and $1.7 billion annually.
“So our prior going into this was that we would see similar reductions in states with [RCL].” Raman says of the study he and Bradford published this April, titled “Recreational cannabis legalizations associated with reduction in prescription drug utilization among Medicaid Enrollees.”
For the study they looked at Medicaid State Drug Utilization Data (SDUD), examining 1,834 observations across all 50 U.S. states and D.C. from 2011 to 2019. They then compared the rates of prescription drug use in prohibition states to the 11 states that have legalized RCL: Alaska, Colorado, California, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, Washington state and D.C.
The results confirmed their hypothesis, according to Raman. They found “significant reductions in the volume of prescriptions within the drug classes that align with the medical indications for pain, depression, anxiety, sleep, psychosis and seizures,” the study says. RCL appeared to correlate with an 11% decrease in prescriptions for depression medications, a 12% reduction in anxiety medication prescriptions, 8% reduction in pain medication prescriptions, 10% reduction for seizure medication prescriptions, and 11% reduction in prescriptions for both psychosis and sleep medications.
Raman and Bradford aren’t the only researchers to make observations like these. Another study published in the Journal of the American Academy of Orthopedic Surgeons in 2021 looked at how state cannabis laws affected opioid prescriptions by orthopedic surgeons in those states. That study found that states with legal medical cannabis saw a full 20% decrease in opioid prescribing.
A third study, published in the Journal of Health Economics, analyzed a dataset of over 1.5 billion opioid prescriptions between 2011 and 2018. That paper concludes that recreational cannabis access laws were associated with an 11.2% reduction in those drug prescriptions, and medical cannabis was associated with a 4.2% reduction.
“[These] results have important implications,” Raman and Bradford’s discussion section notes. “The reductions in drug utilization that we find provide information about potential cost savings for state medicaid programs.”
Raman suggests that recreational cannabis legalization could bring down Medicaid’s $29.1 billion prescription bill. That equates to less taxpayer money spent on opioids, antidepressants, epilepsy medications and other prescriptions, which could bring Medicare premiums down across the board.
“Our results also indicate potential harm reduction [opportunities], as pharmaceutical drugs often come with dangerous side-effects or—as with opioids—potential for misuse,” the discussion section continues.
That is particularly useful for a country that is still in the midst of an opioid crisis. Just in 2021 there were 100,306 overdose deaths in the U.S.—28.5% higher than in 2020, according to the Centers for Disease Control and Prevention. Recreational cannabis offers people a non-addictive natural alternative to those drugs. One that people are actively using despite the fact it isn’t covered by any health insurance plans, Raman points out.
In the end, their results just raise a host of new questions necessitating more research, he says. Like quantitatively, how effective is cannabis as an alternative to these other meds? Why is it such a universal substitute across different classes of prescription drugs? And could cannabis help curb a national opioid crisis?
For scientists like Raman and Bradford, those are all exciting new studies to pursue. But, they’re also studies that can’t be done until federal prohibition comes to an end. Until that happens, there’s really no way for researchers to get into the weeds of those deeper questions.
